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The SmartBike DC bike sharing service, a predecessor to Capital Bikeshare, debuted in 2008 with 10 stations and 120 bicycles.[7] It was the first of its kind in the United States.[8]D.C. Department of Transportation Director Gabe Klein came into office four months later and he eager to expand it, but found the private partner had a "lackluster commitment." Because the agreement specifically prohibited DDOT from paying for anything related to SmartBike, an expansion required DDOT to renegotiate the contract. But in his first meeting with Clear Channel he found that Clear Channel believed they had gotten a bad deal on the original contract that created SmartBike; that following their purchase by Bain Capital they were no longer interested in "municipal street furniture" and that they had neither desire nor obligation to expand the program. In addition, it was difficult and expensive to install new stations, because they required the local utility company to bring electricity to each station.[9] As a result, Klein chose to fold the program and instead partner with Arlington County, VA to build the regional bikesharing program Capital Bikeshare.[10]

Capital Bikeshare was to be owned by the local governments but operated in a public-private partnership with a private operator. Prior to launch Alta Bike Share was awarded the operations contract.[5] The new service launched in September 2010 with 400 bicycles at 49 stations.[11][12] Shortly thereafter, SmartBike DC ceased operations in January 2011.[13]

Planning and implementation costs for Capital Bikeshare totaled $5 million, with additional first-year operating costs of US$2.3 million for 100 stations.[14] The District's share of planning, implementation and first-year operating costs was partially financed by a $6 million grant by the United States Department of Transportation. Arlington County's operating cost share of the plan was $835,000 for the first year, funded by public contributions including a grant from the Virginia Department of Rail and Public Transportation as well as subsidies from Arlington County Transportation, Crystal City Business Improvement District, and the Potomac Yard Transportation Management Association. In April 2011, Capital Bikeshare administrators said they expect earned revenue to cover 50% of the system's annual operating costs.[15] The District of Columbia also planned to sell advertising on Capital Bikeshare stations with the goal of raising US$500,000.[16]

By February 2011, Capital Bikeshare had expanded to 100 stations in the District of Columbia and 14 stations in the Pentagon City, Potomac Yard, and Crystal City neighborhoods in Arlington.[6] In September 2011, Capital Bikeshare announced it had reached 18,000 members and one million rides in its first year of operation, doubling initial expectations.[17] During the summer of 2013, riders averaged almost 300,000 rides per month. That means that during the peak season, each bike is being used about four times per day. Throughout 2013, users traveled almost 2.5 million miles and burned 100 million calories.The average weekly savings was $15.39, resulting in about $370,000 in annual transportation cost savings for the approximately 24,000 members.[18]

Capital Bikeshare has grown steadily, which has driven demand for more stations and bikes. Transportation agencies in each jurisdiction select the location of the rental stations, as well as the number of bike docks, depending on planners' estimates of local demand.[19] Most of the system's users live in or near the city center; stations in the poorer eastern portion of the city are comparatively underused.[9]

The National Park Service originally prohibited Capital Bikeshare stations on the property it manages, including large areas such as the National Mall. However, the agency later reversed itself and said that it would work to include new stations in future expansions.[20] The first two of five approved Capital Bikeshare stations opened on the National Mall on March 16, 2012, shortly before the start of the 2012 National Cherry Blossom Festival.[21]

Also in March 2012, the Arlington County government gave away 550 red Capital Bikeshare helmets and twice as many flashing safety lights as part of a promotion.[22]

In August 2015, Capital Bikeshare announced that it had found a new equipment supplier and would add 435 bikes and 40 stations in D.C. and 140 bikes and 20 stations elsewhere. It also reported having 29,000 members who had taken a total of more than 10.5 million trips.[23][24]

In 2010, a local transportation official said that the system could be expanded further throughout the D.C. area and have as many as 5,000 bicycles within a few years.[25]

In fall 2011, the District Department of Transportation announced plans to add 32 stations and expand 18 existing ones by year's end,[26] then add 50 more in 2012.[27]

Arlington County also announced plans to add 30 stations in fall 2011, primarily along the densely populated corridor between the Rosslyn and Ballston neighborhoods, and 30 more in 2012.[28]

In October 2011, the neighboring city of Alexandria, Virginia, approved plans to deploy 54 bicycles at six stations in the Old Town and Carlyle neighborhoods in 2012, then add six more stations in 2013. The cost of the first year would be $400,000, including operating costs of $100,440.[28][29] The first eight Alexandria stations were deployed in August 2012.

By September 2012, these additions and expansions were to have brought the network to 288 stations and 2,800 bikes in four jurisdictions.[28]

In 2014, plans to add about 60 stations were put on hold after CaBi's main source for the bikes, the Montreal-based Public Bike System Co., went bankrupt. Over the next year, Capital Bikeshare bought used bikes and docks from the Ottawa bikeshare system, and new bikes from Motivate, a "New York-based company formed by investors who purchased previous operator Alta Bicycle Share." The expansion resumed in late 2015.[33] On September 1, 2016, the system celebrated the installation of its 400th station at Division Ave & Foote St NE in Washington, DC.[34]

Rental stations are automated and powered by solar panels, allowing them to be located anywhere space is available. A wireless data link connects the docks and station kiosk to a central bike-tracking and billing database.[36] Riders can use the Capital Bikeshare website and smartphone applications to see where rental stations are located and how many bikes and empty docks they have.[11]

Each bike dock has a repair button; users press this to report a damaged or malfunctioning bike and take it out of service. Riders are expected to notify Capital Bikeshare if a bike is unable to dock at a station and are responsible for the rented bike until it has been returned.[37]

The red-colored aluminum unisex bicycles have three gears, an adjustable seat, and a front basket as well as a headlight and twin red taillights that are powered whenever the bicycle is in motion.[38]

In May 2011, it cost $41,500 to install a station with six docks and $49,300 each for larger stations with 14 docks. Each bicycle cost about $1,000, and the annual operating cost per bike was $1,860.[29]

As of July 2016, Capital Bikeshare has two payment options: swiping a credit card at a dock or signing up online. At any dock, riders may purchase a single trip ($2), a 24-hour pass ($8), or a 3-day pass ($17), swiping a credit card at the station's kiosk to receive a code to unlock a bike. Online, riders may purchase passes for a month ($28) or a year ($85 if paid in one lump; $96 if paid in monthly increments of $8);[40] these riders are mailed an RFID key that can unlock bikes without a code.[37]

Any rider may take unlimited trips of up to 30 minutes, measured from when the bike is withdrawn from a dock to when it is returned. (If a destination station is full, riders can use the kiosk to get 15 more free minutes to return the bike to another location.[37]) Longer trips incur fees for each additional half-hour on a scale that rises from $1.50 to $8.00. These prices are designed to encourage short trips from place to place instead of longer leisure rides.[38][41]

A replacement fee of $1,000 is charged to the credit card on file if a rented bike is not returned within 24 hours.[38]